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Monday, 6 May 2013

Disability and Self Employment UK Part 1

If you are
living in the UK and claiming disability benefits, you might have heard of
Permitted Work. This is a scheme which allows disabled people claiming certain
benefits to try out employment for up to 16 hours per week and earn no more
than £99.50 without it affecting any benefits. As most people know, the rules
for claiming benefits, the rates and types of benefits are constantly changing,
especially at the moment as the government works towards the Universal Credit
system. This website has some good info about which benefits qualify for
Permitted Work and has some up to date information about it:

For a lot of
disabled people even a small amount of work outside the home is at best
impractical, and for others impossible. Working from home with flexible hours would
be a welcome opportunity for many, but the help to find it isn’t exactly
abundant. Self-Employment is risky, but with Permitted Work it is a viable
option.

I’ve
recently started Permitted Work, but it took a long time because it wasn’t very
easy to find anyone who knew much about trying Self Employment with it or how
it worked. In fact a lot of people didn’t know you could try Self Employment with it and thought it was a mistake or I
was confusing it with the New Enterprise Scheme.

If you’re
like me, you want to know as much as possible beforehand, it’s frustrating
thinking you know something only to come across another hurdle at every stage;
forewarned is forearmed and all that.

Although the
rules for Permitted Work and the different benefits all seem to be the same, my
personal experience is of Employment Support Allowance and Permitted work. I
can’t claim to know for definite how it works for other benefits, especially
those where claimants have other sources of income, and filing tax will be a
bit different. Also, each small business
will be different and you might need start up loans and have large expenses, so
please just use this as a guide.

Getting Started

To apply for
Permitted Work, you have to fill in a very simple form called the PW1 form. You
can get this from the Job Centre or your personal adviser. This link goes to aPDFimage of the form. The form is worded more for people trying employment but
basically just asks for your personal info; if it will be self-employment; the
name and address of the employer or company (you); job title; brief description
of duties; when the job begins; how much you will earn; how many hours you’ll
work each week and whether this varies; and when you will get your first
payment.

Make sure
you put the current permitted wage limit (£99.50 per week at the moment), and
that you will be working less than 16 hours.

Send the
form in at least 4 to 6 weeks before you want to start trading. Put this date
on the form where it asks what date the job will begin.

Open a
business bank account. If you want to do online banking this could take a few
weeks to set up because of safety measures. If you will be selling
online/accepting payments online, tell the bank this and ask for a debit card
so you can set up a business PayPal account. You might have to regularly
deposit small amounts of money into the business bank account to keep it
‘active’ until you start trading. Remember to keep a record of this.

Phone the
Benefits Agency on or around the date you said you wanted to start to see if
you’ve been accepted. I didn’t receive a letter telling me I had, I don’t know
if this is standard or an oversight.

If you have
been accepted, ask the Benefits Agency to submit a PW10 form to HMRC.

Go online to
register for Self-Assessment with HMRC. You will get registration numbers, a
government gateway account number and then through the post, an activation
code. This will take a few weeks so keep a record of all numbers and passwords
etc. so you don’t lose or forget them.

Writing a business plan

There is no
set way to write a business plan, but remember it is as much for you as for
anyone else you need to send it to. You can always do alternate versions, for example
a more detailed one if you need to apply for financing, and a simpler one to send
with your PW1 form.

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